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Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

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Are returns received by householders from electricity generated by solar panels assessable income?

My article (with others) on the taxation of payments for household solar panel generated electricity has just been published in the Australian Tax Review.

‘Are returns received by householders from electricity generated by solar panels assessable income?’  (2014) 43 AT Rev 263.

Our answer is yes, where the electricity is fed back into the grid. This is contrary to the ATO’s position in private (and hence non-binding) rulings.The ATO should issue a public ruling to clarify the situation or the government could amend the tax law to exempt such receipts from tax.

This will undoubtedly be politically and economically a very controversial issue, one that needs addressing now.

I got access through my University Library and WestLaw.

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Comments

Comment from Kay
Time November 13, 2014 at 6:20 am

Queensland has the highest take-up of solar panels in Australia. Already at least two coal-burning power stations have been mothballed as a result. Yet politicians continue to heap abuse on solar panel owners – they were described recently by the Qld Treasurer, who BTW lives in the richest, leafiest suburb in Brisbane, as the “champagne-sipping latte set”!

Actually, recent figures show that the highest concentration of solar panels occurs in the lower socio-economic areas, including many being installed by pensioners. These people have installed solar panels in response to/fear of rising electricity prices. Most have borrowed money to be repaid over several years by the savings on their electricity account. My daughter, who was on Abstudy for years, borrowed the cost of her modest system, used electricity very frugally, and, after around 4 years, had managed to pay off the loan. This scenario is common.

It is just a shame that, despite all the talk about climate change, solar panel owners seem to be portrayed as the ‘bad guys’! As far as I am concerned, solar panel owners being paid the same rate as they are charged for electricity, is fair enough recompense. But for those struggling on meagre incomes, there needs to be some assistance (a higher price paid to the solar owner per kW than that charged by the power company, that subsidisation coming mainly from the government) in the first few years after installation to allow lower socio-economic home owners to tap into the long-term advantages of solar ownership. Sadly, unless landlords install solar panels, long-term renters cannot escape from rising power prices.

As I understand it, the bulk of power price rises are the result of a federal government scheme that encouraged power companies to ‘gold plate’ and extend the power grid at a time when power usage was decreasing. Power demand was falling for three key reasons: the impact of energy-efficiency schemes and appliances; the decline of electricity-intensive industry, like aluminium smelters; and, from 2010 onwards, a response to rising prices.

The astonishing story behind these price hikes has been all but ignored. And yet, it may be one of the greatest rorts in Australia’s history. Since 2009, the electricity networks that own and manage our “poles and wires” have quietly spent $45 billion on the most expensive project this country has ever seen. Allowed to run virtually unchecked, they’ve spent vast sums on infrastructure we don’t need, and have charged it all to us, with an additional fee attached. The spending was approved by a federal regulator, and yet the federal government didn’t even note it until it was well underway. Thanks to the networks’ infrastructure binge, we now pay some of the highest prices in the developed world. The impact has been felt most keenly in New South Wales and Queensland, where the networks are government owned and network charges have accounted for two thirds of the price increases. It is clear that infrastructure spending is the single biggest reason power prices have skyrocketed. And this spending binge was based on ridiculous, very faulty data produced by the power companies themselves. Additional power stations have even been built using taxpayer money, but have never even been commissioned due to excess capacity already existing.

One entirely unforeseen consequence of the industry’s profligacy has been the revolution it has triggered in the way we consume power. Not only has it made Australians use less energy but it has also helped to make solar power an economical choice. By stopping their use of the grid during the day, solar-powered households can save up to 60% on their electricity bills. That’s why more than 1.2 million households have installed solar panels over the past six years.

The electricity industry calls this situation “the death spiral”. As more people switch to solar energy and use less from the grid, the networks have to recover their costs from a smaller base. So prices rise, which drives more people towards solar, which makes prices rise again, and so it goes. When feasible home battery storage becomes commercially available in the next few years, this death spiral will only accelerate.

It already has the networks in a panic. In NSW and Queensland, electricity networks are campaigning vigorously to lift their fixed charges; if they succeed, even people who use less electricity from the grid won’t be able to avoid high network costs.

The Carbon Tax? No, I didn’t agree with it, but it accounted for only a small percentage of the rise in power prices. As soon as we can afford to buy reliable storage batteries, we will try to go ‘off the grid’. With a 5 kW solar system, we produce enough power for our own use, but of course, we produce excess during the day, and none at night. The storage of excess power is the biggest problem – so, in the meantime, we will stay on the grid.

Your article has just raised some more concerns!

Comment from Alan B. Goulding
Time November 13, 2014 at 8:06 am

Well yes batteries are of some concern, however, some are getting around that problem, by installing a couple of very large capacity secondhand truck batteries.
I still pay for power even though I placed a solar power station on my roof.
So no, I don’t earn an income!
Even so, while I paid $150.00 last quarter, friends paid a $1,000.00 or better!
And that’s since the carbon tax was abolished!
Alan B. Goulding

Comment from John
Time November 13, 2014 at 9:59 am

Well, it depends on your circumstances. The fact you paid for some electricity doesn’t rule out you being paid (or, often the same thing, receiving a credit against your bill) for electricity generated from your rooftop generator. Batteries seem to me to be the way to go, and I notice recent ads for them in conjunction with panels to basically remove you from the grid. That would, on our analysis, also solve the tax problem because you aren’t selling anything to the electricity company. So too, as we argue, would the government exempting such income for small producers from the income tax net.

Comment from Fred
Time November 13, 2014 at 1:53 pm

Why should wealthy people who can afford solar panels be allowed to engage in tax avoidance?

These people should be taxed and the governments should spend the money on the working class.

Comment from John
Time November 13, 2014 at 3:44 pm

The figures seem to suggest that lower SES suburbs, not just the toffs, also have lots of solar panels.

Comment from Fred
Time November 13, 2014 at 4:24 pm

This also amounts to the privatisation of electricity generation.

Solar panels should be nationalised and placed under community control.

Comment from John
Time November 13, 2014 at 5:28 pm

Dear Fred, if you can’t engage in future in the discussion sensibly, don’t bother.